Possible Government Intervention at New Copper Mine Worries Anglo American

Anglo American expressed concern about possible delays at its new Quellaveco mine in the Peruvian Andes on October 7, 2022. The development came after the Peruvian government indicated that it might take a second look at the relevant water permits.


In an interview with Reuters, Claudia Vivanco, the Anglo American’s corporate manager in Peru said, “Some of the positions we have heard from the government regarding the issuance of water licenses for Quellaveco, they obviously generate worry.”

The country is the world’s second-biggest producer of copper and the global miner’s new Peruvian copper mine is the largest new project set to begin commercial operation this year. Anglo American has invested about $5.5 billion in the Quellaveco copper mine and it is expected to have an output of approximately 300,000 tons of copper every year.

However, the Anglo American and the mining sector in Peru are concerned that the start of commercial operations might suffer delays after the country’s Ministry of Agriculture commented that it would check the water permits at the Quellaveco mine. The potential review can be linked to local farmers who had expressed their concern that the project might deprive them of water.

The country’s mining chamber, the SNMPE, said in a statement, “The government cannot change technical decisions based on political pressure.”

New copper mine obtained water permits

Vivanco said that their new copper mine had already obtained water permits based on a process that was purely “technical, transparent, and public” and that the questions which were now being raised were not sustained by facts. Big mining sites, like the Quellevaco mine, generally require a large amount of water for their operations.

“We are looking for a balance between responsible extraction and the continuity of (local) farming,” the concerned government agency said in a statement on October 7, 2022. The agriculture ministry also added that it was respectful of private investment.

The ministry further stated that the water permit allowed the mine to utilize 22 million cubic meters of water from the two rivers which flowed onto the Tambo Valley in Peru. This, however, worried the local farmers who opined that it might deprive them of water for their farms.

The mining company, when asked about the potential problem, said that the farmer’s concerns were unfounded and that the mine’s principal water source is not fit for agriculture.

Vivanco also said, “we trust that the government will make the best decisions to benefit the country’s development and within the rule of law.”

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Activists say BHP’s Proposal to Extend Coal mine Until 2116 “Delusional”

BHP has applied to expand its Peak Downs mine, located in the Bowen basin, in a joint venture with Mitsubishi. However, certain activists claimed that the proposal from the mining giant to extend the coal mine in Queensland by up to 93 years was “delusional”.

BHP’s proposed expansion would cover 4,000 hectares and may affect the habitat of koalas, greater gliders, and other endangered species.

In a referral given to the federal environment department, BHP said that the latest end date for the project, if approved, would be 2116.

“It is hard to imagine anyone had a straight face when they keyed those dates in,” mused Australasian Centre for Corporate Responsibility leader Harriet Kater. She had also claimed that the move by BHP to extend the mine for 93 years was “delusional.”

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Kater went on to add, “What part of net zero by 2050 does (BHP) not understand?”
“The company has been speaking out both sides of its mouth on climate change for too long.” She stressed, “It is hard to imagine that BHP’s carefully curated reputation for climate leadership can withstand such decisions for much longer.”

In August 2022, the mining giant had declared that any BHP Mitsubishi Alliance (BMA) metallurgical coal growth was on hold following modifications in Queensland’s resource royalty scheme.

BHP has however opined that it does not believe that high-quality coking coal demand was likely to go down any time soon.

Anglo American sought approval to build another coal mine

The Anglo American company had also sought the approval of the federal government to build another metallurgical coal mine south of Blackwater in Central Queensland. The mine is expected to operate for up to 90 years.

Ellie Smith, spokesperson for Lock the Gate Alliance Queensland, mused that, “BHP’s attempts to expand its Peak Downs project and mine coal for another 93 years demonstrate how hollow its recent threats were over the Queensland government’s modest royalties increase.”

She also said that the mining company’s proposal had been submitted to the federal government in a week which coincides with the environment and water minister, Tanya Plibersek, launching a new action plan for endangered species. The new plan promised that there would be no new extinctions of any Australian wildlife.

“Unfortunately, this [proposal] also means the many threatened animals in the path of BHP’s planned expansion face a real threat.”

A spokesperson for the BHP Mitsubishi Alliance countered this argument by stating that “[t]he world will need reliable long-term supplies of higher quality metallurgical coal for steelmaking, to support economic development and to make the infrastructure required for decarbonisation”.

They also added that they were concerned about Queensland’s “significant” increase in coal royalties.

“The near tripling of the top royalty rate will make future Queensland projects less competitive and less likely to go ahead,” the spokesperson further said.

Earlier this year, the mining giant had applied to build another metallurgical coal mine south of Blackwater in Queensland. The Chief Executive Officer Mike Henry insisted that their application did not necessarily mean that the project would go ahead or that the mine would run for more than 90 years.

It is also important to note that around thirty major coal projects are still waiting for approval from the federal environment minister.

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